The Great Debate UK
Spot gold prices are up over 40 percent year on year. Yet, according to the World Gold Council, demand for gold in the third quarter of 2009, dropped by 34 percent year on year. Of course, demand in the third quarter of 2008 was exceptionally high due to the financial crisis. As well, relative to the third quarter average of the five years to 2007, demand for gold in Q3 2009 was down 4 percent.
When confronted with the ferocity of the rally in gold, the fact that the third quarter demand for gold was below the seasonal average is surprising. The dynamic between price and demand suggests some fall in supply perhaps led by increased hoarding.
According to the council mining supply is fairly inelastic.
Supply of recycled gold generally helps stabilise the price, in recent years this has been 28 percent of annual supply. Between 2003 and 2008 central bank sales represented the third biggest source of supply.
It remains unclear what the recent gold purchases from the Central Bank of India means for the demand/supply dynamic of gold going forward.
Big bonuses have dominated headlines in recent weeks, and it is expected that David Walker’s review of corporate governance in British banks, due out on Thursday, will add fuel to the debate. While remuneration is likely to steal the limelight, deeper in the darkness lies a less emotive evil – risk.
from UK News:
Government plans to split and sell state-owned Northern Rock have met with mixed reaction.
The plan is to create a new savings and mortgage bank, called Northern Rock Plc, which will take deposits and offer savings and home loans.
- David Andrews is director of David Andrews Media, a financial public relations consultancy with high profile fund management and financial services clients based in the UK, Ireland, Cayman Islands, Cape Verde, Beijing, Europe and the U.S. The opinions expressed are his own. -
David is a former financial journalist best known for his weekly Daily Express and Conde Nast ‘Money Matters’ columns.
Few will be lifting a glass to toast the first anniversary of the collapse of investment bank Lehman Brothers a year ago this week. With billions of dollars under management and thought to be invincible, the private bank was generally regarded as a potential gateway to the riches of Croessus for the ordained Masters of the Universe who prowled its Jackson Pollock-lined corridors.
LONDON/PARIS, April 23 (Reuters) – Germany is to set up a system of bad banks before the summer recess to hold some 250 billion euros of toxic assets. Finance Minister Peer Steinbruek has assured taxpayers that his solution — called “eine Bad Bank” (there is no German word for the concept) — will not weigh on the budget.